TO WHAT EXTENT DOES THE AUDIT COMMITTEE EXPERIENCE AFFECT FINANCIAL RISK DISCLOSURE? NON-LINEAR EVIDENCE FROM SAUDI ARABIA; [審計委員會的經驗在多大程度上影響財務風險揭露?來自沙烏地阿拉伯的非線性證據]

The audit committee (AC) plays a pivotal role in overseeing financial reporting and holds a position of great importance among subcommittees. It is crucial to underscore the significance of this committee in ensuring the accuracy and reliability of financial risk disclosure (FRD). This research study aims to investigate the relationship between the experience of AC members and FRD in Saudi energy companies from 2009 to 2021. The analysis involved several factors, including the size of the AC, the number of meetings held, the expertise of its members, and the extent of overlapping responsibilities. The results obtained from the linear model using fixed effects regression demonstrate that smaller ACs, comprising members with financial or accounting expertise tend to exhibit higher levels of FRD. A non-linear (quadratic) relationship is identified between AC members’ experience and FRD. Notably, a critical threshold is observed at 21 companies, beyond which FRD declines. To enhance FRD, companies should limit the appointment of individuals who have served in more than 21 companies and prioritize the inclusion of expert members who have had less involvement in other committees. Our results are robust and confirmed using random effects generalized least squares regression. It is critical to acknowledge that this study has certain limitations that present opportunities for future research endeavors. Future studies should investigate the non-linearity of other variables, explore the implications of non-FRD, and expand the scope of analysis to an international level, encompassing diverse sectors and incorporating additional attributes such as education level and position. © 2023 Science Press. All rights reserved.